THE GIST
Australia’s fastest-growing independent brewer, Balter Brewing Company, has sold to Carlton & United Breweries.
The deal includes clauses to ensure all founders, staff, and recipes are guaranteed to remain on for the next five years. Head brewer Scott Hargraves tells Good Beer Hunting that no deal would have been made if the brewery couldn’t guarantee jobs—and that no changes would be made to the beer.
“We’re all really confident that we can forge ahead, and it’s a way for us to protect the business and the employees,” he says. “There would have been no deal if that wasn’t the case.”
Hargraves explains how he made sure that his recipes were locked in for the next five years.
“Ant Macdonald, our CEO, has been an absolute legend in all this. I’ve worn a crack in the floor between his and my office, banging on his door, doubly, tripely, quadrupley trying to ensure that my beers were safe, and my recipes and my ingredients and the way I do things were protected, and they are legally,” he says. That also extends to where the beer is brewed: no Balter beer can be brewed at a CUB/Asahi brewery unless Hargraves signs off. “They can’t do any cross-brewing unless I approve it, which I’m not really intending to do,” he says.
The Gold Coast-based brewery, whose co-founders include a trio of world-famous surfers—three-time world champion Mick Fanning, one-time world champion Joel Parkinson, and 2008 runner-up Bede Durbidge—has been dogged by sales rumors since its founding in 2016.
Two weeks ago, however, the ripples became a tidal wave, forcing fellow co-founder Stirling Howland to deny the claims publicly. As told to The Shout on November 29, he said that, “We’ve been subject to these types of rumours from day one. It’s par for the course now and not worth commenting on.”
Less than a week later, the sale has gone ahead, with eyes now focused on expansion.
The purchase brings another chunk of the market into the Asahi stable, following this year’s sale of Balter’s new owner, CUB, from AB InBev to Asahi.
With the CUB deal, Asahi now owns two of Australia’s top-three largest-selling beers in the form of Great Northern and Victoria Bitter (sandwiched between them in the top three is Kirin-owned XXXX Gold). According to sales data from IRI, a market research company, Great Northern is also Australia’s fastest-growing year-on-year brand, with $177m growth for the 2018/19 financial year.
Included in the Asahi/AB InBev sale were ZX Ventures brands Pirate Life Brewing and 4 Pines Brewing Company. Both of the nationally distributed breweries had sold to ZX Ventures late in 2017, and are currently undergoing expansion, with brewpubs in the works around Australia. Earlier this year, Asahi also purchased Australia’s current back-to-back Australian International Beer Awards champion (in the medium-sized brewery category), Green Beacon Brewing Company. It also purchased Australian craft original, Mountain Goat Beer, in 2015. Mountain Goat is currently expanding with a new brewpub set to open soon.
WHY IT MATTERS
By the numbers, and based on fan support, Balter is a big deal in the Australian market. With surfing champs at the helm (one of whom is also famous for punching a shark—in self defense, of course), the founders also opted to employ head brewer Scott Hargraves (formerly a Stone & Wood senior brewer) to quiet any suggestion they were just here for a radical time rather than serious beer. In the three years since its first release, by revenue generated, Balter has become the fifth largest, independent brewery in the country (per IRI data for 2018/19), and the fastest-growing overall with $8-million year-on-year growth.
It also has love from the Australian beer community. In the annual GABS Hottest 100 poll, which tallies votes from more than 30,000 participants, Balter’s XPA was voted #1 for the second year running, with two more in the top 10 (IIPA #6 and IPA #7). The brewery itself was also voted best in Australia for the second year in the annual Beer Cartel survey (polling more than 25,000 people).
One interesting phenomenon regarding beer sales in Australia, as seen in the 2018/19 IRI data for both 4 Pines and Pirate Life, is that sales will typically dip post-buyout. During that period, 4 Pines’ sales were down 2%, and Pirate Life was down 5%. If we look at consumer sentiment in the form of the aforementioned Hottest 100 poll (which may seem a frivolous metric, but is a big deal for the Australian public—the results are a talking point in nationally circulated non-beer media), Pirate Life IIPA went from being a regular contender in the top three to almost disappearing from the list altogether—it landed at only #79 in 2018. With voting about to go live for 2019 (and results to be announced on January 25th), these past instances could give some indication of likely public reaction to this news.
As 2019 wraps up, and we all take some time off to churn out end-of-the-decade lists, the landscape in Australian beer has changed enormously—not only since the beginning of the decade, but even since the beginning of the year. Following these sea changes, 2020 looks set to be even more turbulent, and unpredictable.
Words by Luke Robertson